Question

Give an example of a government (local, state, or federal) policy that was intended to help workers but ultimately resulted in higher unemployment. Be sure to explain the impact on unemployment.

Answer 1

One example of a policy that has increased the unemployment rate is the minimum wage policy and in this regard it can be mentioned that the minimum wage policy actually got to set a bar for the wage that is to be paid and in this regard it is above the market wage as a result of which a lot of surplus in labour is created as a result of which unemployment prevailed in many of the industries and this can be due to other reasons such as immigration where is the minimum wages high this will attract more immigrants as a result of which the supply is high and because the companies send the effort less than the minimum wage there demand conditions decrease where places with more supply got to have higher level of unemployment.